DirectCash Payments Inc. Announces Results of Operations for the Three and Six Months Ended June 30, 2011

Thursday, August 11, 2011

DirectCash Payments Inc. Announces Results of Operations for the Three and Six Months Ended June 30, 201109:04 EDT Thursday, August 11, 2011CALGARY, ALBERTA--(Marketwire - Aug. 11, 2011) - DirectCash Payments Inc. ("DirectCash" or the "Corporation") (TSX:DCI) today announced consolidated financial results for the three and six months ended June 30, 2011. DCPayments's consolidated financial statements for the three and six months ended June 30, 2011 and Management's Discussion & Analysis, as well as additional information about the Corporation are available on SEDAR (www.sedar.com). Q2 2011 Financial and Operational Highlights compared Q2 2010: Increased EBITDA 5% to $9.5 million Increased Gross Profits 9% to $14.0 million Funds from operations payout ratio has been reduced to 54% from 85% Increased ATM network bringing the total number of active ATMs to 7,892 Management's Commentary"We are very pleased with our continued consistent financial results in 2011" said Jeffrey Smith, DirectCash's President and Chief Executive Officer. The primary drivers for the improvements over the prior year period are the contributions from the acquisitions completed during 2010. Consistent performance and strong growth has been seen throughout all of DirectCash's lines of business. DirectCash will continue to pursue growth through additional accretive acquisitions as opportunities arise. DirectCash's stable, contracted revenue stream and dominant market positions will continue to provide consistent cash dividends to DirectCash's Shareholders. DirectCash continues to focus on its Canadian and Mexican operations, and consider new geographic markets to add to recurring services revenue growth and gross profit margins. Conversion CompletionThe Fund successfully completed a previously announced plan of arrangement under the Business Corporations Act (Alberta) pursuant to which the Fund was converted from an income trust to a dividend paying corporation operating under the name "DirectCash Payments Inc.". Beginning after January 1, 2011 (starting with the January 31, 2011 record date), Shareholders of DCPayments have received monthly payments in the form of dividends, with the initial monthly dividend set at $0.115 per Common Share.International Financial Reporting StandardsResults are reported in Canadian dollars and have been prepared in accordance with International Financial Reporting Standards ("IFRS") for the period ended June 30, 2011. For reconciliations of equity and total comprehensive income for comparative periods and of equity at the date of transition reported under previous Canadian GAAP to those reported for those periods and at the date of transition under IFRS see the notes to the Q2 2011 Financial Statements available for download from www.SEDAR.com. Results of Operations for the three and six months ended June 30, 2011:Three months endedSix months endedJune 30June 302011201020112010Number of machinesATM terminals - active17,8926,5637,8926,563Debit terminals - active13,2723,1393,2723,139Number of transactionsATM transactions8,770,0837,663,27016,984,20914,948,410Debit terminal transactions2,905,0732,926,4695,512,8105,496,942Prepaid cash card activations738,124813,6351,552,9541,645,776Prepaid cash card transactions1,837,5461,808,0273,958,9853,838,1401DirectCash has included statistics only for sites that recorded a transaction in the last calendar month of the period indicated.Compared to the prior year period, the number of active ATMs increased by 1,329. The net increase is primarily a result of the acquisition of 830 ATM sites and related contracts of Cashline Inc. on July 31, 2010. ATM transactions increased during the three and six months ended June 30, 2011 compared to the prior year due to the increased number of ATMs deployed. The increase in transactions relates primarily to the acquisition of Cashline Inc. which was a quality portfolio of ATMs that produced higher transaction volumes than the average ATM in Canada. Based on statistics provided by Interac, ATM transactions in the Canadian industry as a whole continued their historical decline on a per ATM basis (this results from a combination of a decrease in total transactions and an increase in the number of ATMs that the total transactions are spread among). On an industry wide basis, as more ATMs have been added to the Canadian marketplace there has been no corresponding increase in overall industry transactions. DirectCash's prepaid products business and entrance into new geographic markets are offsetting this effect on DirectCash's business. DirectCash's goal in the ATM business is to continue to maintain existing customer relationships, add sites and grow aggregate transactions through accretive acquisitions and to maximize site profitability through cost and quality control. In addition, DirectCash is considering new geographic markets, to add to recurring services revenue growth and gross profit margins.On a year over year basis, the number of active debit terminals has increased by 133 due primarily to an acquisition made during the third quarter of 2010. Debit terminal transactions are relatively flat for the three and six months ended June 30, 2011. DirectCash continues to pursue organic growth in this business segment and to grow market share by providing retailers with unique products and services to enhance the business viability of the debit terminal for the retailer.Prepaid card activations declined by 9% and 6% respectively for the three and six months ended June 30, 2011 compared to the prior year period. Notwithstanding the decline in activations, gross profit increased in this line of business due to the addition of new products, including the bank account product offered through DirectCash's strategic alliance with DC Bank and one of DirectCash's significant customers. The MasterCard prepaid card program continues to find traction and displace some debit card activations.The increase in prepaid card transactions for the three and six months ended June 30, 2011 is due to growth within existing customer relationships, as prepaid products continue to gain customer acceptance and confidence. Prepaid credit card transactions experienced significant growth during the three and six months ended June 30, 2011 compared to the prior year. Activation and transaction volume figures include both prepaid debit and prepaid credit cards. The following table presents a summary of the DCPayments' selected consolidated financial information for the three and six months ended June 30, 2011 and 2010:Financial HighlightsThree Months EndedSix Months Ended(thousands)June 30June 302011201020112010RevenuesRecurring services revenue$23,068$22,371$47,318$43,295Products revenue5,0234,99810,55710,188Interest income431811820Total revenue$28,134$27,387$57,993$53,503Gross ProfitRecurring services and interest$13,564$12,644$26,911$23,933Gross profit margin58.7%56.5%56.7%55.3%Products4732281,214744Gross profit margin9.4%4.6%11.5%7.3%Total gross profit$14,037$12,872$28,125$24,677Total gross profit margin49.9%47.0%48.5%46.1%Operating Expenses & Net Finance costs:Personnel expenses2,7202,0605,4024,055Long-term incentive plan231378663766Other expenses1,5701,3133,3572,738Purchase gain on acquisition---(4,238)Depreciation of property and equipment1,2097952,3531,561Amortization of intangible assets2,7412,1085,6174,166Finance costs425310814578Distributions on Exchangeable partnership units-2,014-3,576Net change in fair value of exchangeable partnership units-7,017-3,622Unrealized loss on foreign exchange1501328,89716,04518,20716,856Net income (loss) before income taxes$5,140$(3,173)$9,918$7,821Income taxes - Current(20)5373106Deferred income tax1,268(541)2,452(987)Net Income (loss)$3,892$(2,685)$7,393$8,702Net income per share, basic0.28(0.34)0.541.12Net income per share, diluted0.28(0.34)0.531.10Add back:Finance costs425310814578Distributions on Exchangeable partnership units-2,014-3,576Net change in fair value of exchangeable partnership units-7,017-3,622Purchase gain on acquisition---(4,238)Depreciation of equipment1,2097952,3531,561Amortization of intangible assets2,7412,1085,6174,166Income taxes - Current(20)5373106Deferred income tax1,268(541)2,452(987)EBITDA$9,515$9,071$18,702$17,086EBITDA margin33.8%33.1%32.2%31.9%Total assets$161,566$128,105$161,566$128,105Total debt47,60239,89547,60239,895Total debt net of cash(1,366)14,291(1,366)14,291RevenueOn an aggregate basis, revenues have increased by 8% for the six months ended June 30, 2011, as compared to the prior year period. Revenue by line of business, which includes both recurring services and products revenue, is as follows:Revenue by Line of BusinessThree months endedSix months ended(thousands)June 30June 302011201020112010ATM Business$13,213$10,814$26,294$20,616Prepaid products business14,40015,97330,67431,809Debit terminal business5216001,0251,078Total Revenue$28,134$27,387$57,993$53,503Revenue by typeRecurring services$23,068$22,371$47,318$43,295Products5,0234,99810,55710,188Interest431811820Total Revenue$28,134$27,387$57,993$53,503Revenue – Recurring ServicesRecurring services revenue relates to revenue earned from transaction processing activities, including DirectCash's ATM, debit terminal and prepaid product lines of business.The increase of 9% over 2010 in recurring services revenue is primarily attributable to the ATM line of business. The increase in ATM recurring services revenue can be attributed to the revenues generated from the additional 830 ATM sites and related contracts acquired from Cashline Inc. on July 31, 2010, as well as additional acquisitions made throughout 2010.The decrease in prepaid products revenue comes primarily from the sale of low margin prepaid cellular and long distance airtime products. Additionally contributing to the decrease was the decline in prepaid card activations, which can be attributed to regulations in the payday loan industry, in which DirectCash has a significant customer, that restrict the number of consecutive loans a customer can be issued. Notwithstanding the decline in activations, gross profit increased in this line of business due to the addition of new banking products and services offered through DirectCash's strategic alliance with DC Bank. On a year over year basis, revenue in the ATM business has increased by 28%. ATM revenues include the revenue from the sale of ATM machines and parts, processing ATM transactions as well as miscellaneous revenues and interest received.The 5% decrease in debit terminal revenue for the six months ended June 30, 2011 is a direct result of one time contract fees collected during the second quarter of 2010.There is historic seasonality in processing transaction volumes, with the highest ATM transaction activity in Canada typically occurring in the second and third quarters of the year. The first and fourth quarters are traditionally DirectCash's weakest quarters in terms of processing transactions and gross profitability. In Mexico, seasonality in the ATM business is the opposite of what is seen from DirectCash's Canadian operations. DirectCash has eliminated the impact of seasonal fluctuations in cash flows to Shareholders by equalizing monthly cash dividends. This seasonality is considered when determining levels of available cash at the end of each reporting period. Revenue – ProductsProduct revenue includes sales of ATM machines, debit terminals and related parts, as well as prepaid products, consisting of (a) prepaid cash cards (debit and credit) and (b) prepaid telephone cards (both physical ("hard cards") and electronic ("virtual vouchers")).For the three and six months ended June 30, 2011 revenue from product sales increased by 1% and 4% respectively compared to the prior year period. The increase can be explained primarily by an increase in the sale of prepaid cash cards, partially offset by a decline in the sale of telephone cards. The increase in the sale of prepaid cash cards is a result of timing of sales, as customers order intermittently in large quantities to benefit from volume discounts.ATM and debit terminal sales were up due to existing customers purchase of new terminals that meet industry standards.Interest IncomeDuring the six months ended June 30, 2011 interest income increased significantly compared to the prior year period primarily as a result of the renegotiation of DirectCash's agreement with its bank in Mexico regarding funds held in relation to cash requirements for Mexican operations.Gross ProfitsIn total, gross profits have increased by 9% and 14% respectively for the three and six months ended June 30, 2011, as compared to the same period last year. Gross profit by line of business, which includes both recurring services and products revenue, is as follows:Gross profit by Line of BusinessThree months endedSix months ended(thousands)June 30June 302011201020112010ATM Business$7,185$6,248$14,374$11,850gross profit margin54.4%57.8%54.7%57.5%Prepaid products business6,4476,15412,94911,999gross profit margin44.8%38.5%42.2%37.7%Debit terminal business405470802828gross profit margin77.7%78.3%78.2%76.8%Total Gross Profit$14,037$12,872$28,125$24,677gross profit margin49.9%47.0%48.5%46.1%Gross profit by typeRecurring services and interest$13,564$12,644$26,911$23,933gross profit margin58.7%56.5%56.7%55.3%Products4732281,214744gross profit margin9.4%4.6%11.5%7.3%Total Gross Profit$14,037$12,872$28,125$24,677gross profit margin49.9%47.0%48.5%46.1%Gross Profitability – Recurring ServicesTotal gross profits from recurring services revenue and interest income for the three and six months ended June 30, 2011 increased by 7% and 12% respectively over the prior year.The increase in gross profits for recurring services can be attributed to the following factors: (a)fees associated with bank accounts and related products offered by DirectCash Bank to prepaid customers;(b)higher activity in prepaid credit card transactions, and;(c)the impact of the ATM acquisitions made during 2010.On a year over year comparison, gross profit margins were slightly higher during the three and six months ended June 30, 2011. The debit terminal recurring services gross margins declined during the second quarter as compared to the prior year period as a result of one time contract fees collected during 2010.The introduction of bank accounts and associated products, as well as the increase in transaction levels and improved performance from the prepaid credit card product in the prepaid products line of business resulted in the increase in contribution from the recurring services business segment.Gross Profitability – ProductsGross profit from the sale of products for the three and six months ended June 30, 2011 increased by 107% and 63% respectively from 2010 levels. The increase can be explained primarily by a combination of increased sales and higher margin contributions on the sale of prepaid cash cards and ATMs. The increase in the sale of prepaid cash cards is a result of timing of sales, as customers order intermittently in large quantities to benefit from volume discounts. The sale of ATMs has increased, as existing customers purchase new equipment that meets industry standards. DirectCash has a strategic goal of keeping ATM and debit terminal purchase prices as low as possible for the DirectCash customer in order to maximize the number of machines that can be placed. DirectCash also introduced financing options that enables customers to pay for machines and security upgrades over a period of time. DirectCash believes that this strategy will result in additional long-term revenue generating services contracts.Selling, General & Administrative Expenses ("SG&A")For the three and six months ended June 30, 2011 SG&A expenses increased by 27% and 29% respectively from the prior year. The increase is the result of higher salaries and benefits incurred from the addition of some key staff members brought on to assist in DirectCash's growth and implementation of network upgrades, as well as additional fees associated with compliance related to Anti-Money Laundering and to the bank account product offered through DirectCash's strategic alliance with DirectCash Bank.As a percentage of gross profits, SG&A was 31% (YTD – 31%) during the three months ended June 30, 2011 compared to 26% (YTD – 28%) for the same period last year. Long-term incentive plan ("LTIP")Details of the Long-term incentive plan can be found in the notes to the financial statements. The base threshold is $1.99 per Common Share of "Distributable Cash Flow" as defined under the "LTIP Agreement", effective from January 1, 2011. Finance CostsFor the six months ended June 30, 2011 finance costs increased by 41% over the prior year period. The increase is primarily due to increased ATM vault cash requirements incurred as part of the acquisition of Cashline Inc. on July 31, 2010.All DirectCash debt is currently on floating interest rates. A one percent change in interest rates would result in an approximate $117 thousand change in finance costs for the period.Net IncomeNet income for the three and six months ended June 30, 2011 increased by 245% and decreased by 15% respectively compared to the prior year period. The increase in net income during the quarter ended June 30, 2011 compared to the prior year period is primarily attributable to improved gross profits and the additional effects of the transition to IFRS, including distributions on and the net change in fair value of exchangeable partnership units. The decrease in net income during the six months ended June 30, 2011 can be attributed to the following factors: (a)$3.4 million in deferred income tax during the six months ended June 30, 2011;(b)$4.2 million purchase gain on acquisition incurred during the first quarter of 2010, and;(c)the additional effects of the transition to IFRS, including distributions on and the net change in fair value of exchangeable partnership units.The disparity between net income and cash dividends is primarily due to amortization of intangible assets related to ATM, debit terminal and prepaid product contracts. Typically, these contracts include automatic renewals for a further 5-7 year period, and a right of first refusal to match a competitor's bona fide offer on renewal unless the customer terminates the contract within a specified time period. Thus, while a contract acquired by DirectCash may have a fixed initial term (which is the time period over which amortization of this intangible asset occurs) DirectCash's experience is that DirectCash is usually able to keep the applicable ATMs attached to the DirectCash network with no or little capital expenditure. Also, any ATM added by organic growth (i.e. through the DirectCash sales force) has a much lower capital cost than ATM locations added through acquisition.EBITDAFor the three and six months ended June 30, 2011, EBITDA increased by 5% and 9% respectively over prior year levels, which is lower than the respective 9% and 14% increases in gross profits. This reflects the higher gross profit contributions offset in part by the higher SG&A costs. As a percentage of revenue, EBITDA was 34% and 32% respectively during the three and six months ended June 30, 2011 as compared to 33% and 32% during the prior year periods. The increase during the quarter ended June 30, 2011 as compared to the prior year is a result of improved gross profit margins in the prepaid products line of business partially offset by increased overhead expenses, as staff support has increased with respect to development and compliance associated with the bank account product offered through DirectCash's strategic alliance with DC Bank.For comparative purposes, the $4.2 million purchase gain was eliminated from DCPayments' EBITDA calculations due to its non-recurring nature.Capital ExpendituresDirectCash incurred the following expenditures of a capital nature:Capital ExpendituresThree months endedSix months endedJune 30June 302011201020112010Per consolidated financial statements:Equipment$1,778$1,103$3,124$2,097Intangible assets271,407603,111Acquisitions---319$1,805$2,510$3,184$5,527Split between growth and maintenance:Growth capital$1,344$1,899$2,013$4,359Maintenance capital4616111,1711,168$1,805$2,510$3,184$5,527Growth capital expenditures relate to acquisitions and other expenditures that increase DirectCash's productive capacity, while maintenance capital expenditures maintain productive capacity at existing levels.Productive capital maintenance expenditures for six months ended June 30, 2011 are relatively flat as compared to the prior year period. Growth capital expenditures can vary widely between reporting periods due to the intermittent nature and varying size of acquisitions.Liquidity and Capital ResourcesDirectCash believes that the funds generated from operations will be sufficient to allow DirectCash to meet ongoing requirements for working capital, maintenance capital expenditures including investments in technology capital, interest expense, and cash dividends to Shareholders.DirectCash's actual cash generated from operations will be dependent upon future financial performance, which in turn will be subject to financial, tax, business and other factors.As of June 30, 2011, DirectCash utilized approximately $48 million of total available credit facilities of $100 million. A summary of DirectCash's available credit at June 30, 2011 is as follows:Credit facilities(thousands)UtilizedLimitAvailableRevolving credit facility$16,229$60,000$43,771Acquisition credit facility31,37340,0008,627$47,602$100,000$52,398The revolving credit facility is used for ATM cash loading, working capital requirements and commercial letters of credit. In addition, DirectCash has an outstanding letter of credit in favour of MasterCard International of US$ 2.5 million (CDN$ 2.4 million) relating to DCPayments' prepaid MasterCard program. This credit facility is demand in nature and bears interest at the Bank's prime lending rate plus 0.375%.The acquisition credit facility is demand in nature and is utilized for the acquisition of additional ATM and Debit Terminal network and Prepaid Product assets, and general corporate acquisitions in complimentary business lines. The facility bears interest at the Bank's prime lending rate plus 0.375% or at banker's acceptance rates plus 1.875% per annum.Notwithstanding the demand nature of the facilities, there are no scheduled principal repayments.During the quarter, DirectCash increased its credit facilities from $80 million to $100 million to accommodate increased vault cash and operating requirements. DirectCash is subject to the following primary lending covenants:Lending covenantsJun-30Covenant LimitFunded Debt to Recurring Quarterly Revenue1.9:1< 10:1Fixed Charge Cover Ratio23.4:1> 4:1Senior Debt to EBITDA1.2:1< 2:1DirectCash operated well within its loan covenant limits and anticipates continuing to do so in the future. Breach of DirectCash's bank loan covenants could result in the triggering of remedies by DirectCash's lenders, which could negatively impact distribution payments.Additional InformationAdditional information about DirectCash, including DirectCash's Annual Information Form and other public filings is available on SEDAR (www.sedar.com) and on DirectCash's website (www.directcash.net). Non-IFRS MeasuresThere are a number of financial calculations that are not defined performance measurements under IFRS but which DCPayments believes are useful and accepted performance measurements utilized by the investing public in assessing the overall financial performance of corporations.Earnings before interest, taxes, depreciation and amortization ("EBITDA")EBITDA represents gross profits less selling, general and administrative expenses ("SG&A") and long-term incentive plan expenses, and is not a defined performance measure under IFRS. DCPayments believes that EBITDA is a useful supplementary disclosure commonly used by the investing community to assess and compare cash flows between entities. EBITDA specifically excludes depreciation, amortization, income taxes and interest expense. DCPayments EBITDA may differ from similar computations as reported by other issuers and, accordingly, may not be comparable to EBITDA as reported by such issuers. The most directly comparable IFRS measure is Net Income. A reconciliation between EBITDA and Net Income is disclosed in the "Financial Highlights" schedule later on.Funds from operations and funds from operations per shareFunds from operations and funds from operations per unit are non-IFRS measures used by DCPayments as an indicator of financial performance. Readers are cautioned that funds from operations is not a defined performance measure under IFRS and that funds from operations cannot be assured to continue at equivalent levels in the future. DCPayments calculates funds from operations as equal to the net cash from operating activities before changes in non-cash working capital, after provision for productive capital maintenance capital expenditures (see discussion below). DCPayments' funds from operations and funds from operations per share may differ from similar computations as reported by other issuers and, accordingly, may not be comparable to funds from operations and funds from operations per common share as reported by such issuers.Up until January 1, 2011, Unitholders of the Fund received cash distributions sourced from distributions made by DirectCash LP indirectly to the Fund. The Fund's policy was to distribute, to the maximum extent possible, the cash earned from operations to Fund Unitholders, less amounts estimated to be required for expenses, productive capital maintenance, cash redemptions or repurchases of Units, any current tax liability, or other obligations, debt repayments and any reasonable reserves established. The Fund made monthly cash distributions to Unitholders on the last business day of each month to Unitholders of record on the last business day of the preceding month.From August 2006 to January 1, 2011, monthly distributions were paid at $0.115 per Unit per month ($1.38 per Unit annualized) and special distributions of $0.120 per Unit, $0.100 per Unit and $0.250 per Unit were paid December 31, 2009, June 30, 2010 and February 28, 2011 respectively. Beginning after January 1, 2011 (starting with the January 31, 2011 record date), Shareholders of DCPayments have received monthly payments in the form of dividends, with the initial monthly dividend set at $0.115 per Common Share. All dividends are eligible dividends for the purpose of the Income Tax Act (Canada) unless indicated otherwise. Dividends are funded from cash flows generated by the operation of the business. As of January 1, 2011, all of the income generated at the level of the various subsidiaries within the DirectCash Group income is taxable by applicable government authorities with the remaining after-tax funds either being retained by the subsidiary or distributed/dividended up to DCPayments (where it can be made available for payment of dividends by DCPayments). Continued future distribution of dividends (and the amount of any dividends) is subject to DCPayment's Board of Directors approval. DCPayments' Board of Directors is not obligated to distribute all net available cash as dividends to shareholders.Productive capital maintenance expendituresDCPayments differentiates capital expenditures between growth and productive capital maintenance ("Maintenance Capital"). There is no such distinction under IFRS. However, DCPayments believes it is important to differentiate between them as maintenance capital expenditures represent a discretionary adjustment to distributable cash flow while growth capital does not.Maintenance capital expenditures are defined as expenditures required to service and maintain DirectCash's existing productive capacity, while growth capital is expended to increase DirectCash's productive capacity by adding additional sources of revenue not currently in existence. Current measures of productive capacity that DCPayments utilizes include ATMs and debit terminals under contract (see "Operational Highlights"), software and hardware upgrades to existing infrastructure, ATM and debit terminal equipment upgrades necessary to meet changing regulatory requirements, contract extension incentives, and fleet vehicle purchases and upgrades, are some examples of maintenance capital expenditures. Examples of growth capital expenditures include the acquisition of a competitor's assets, the cost of an ATM in a new location, or technology costs related to new sources of revenue.Readers are cautioned that productive capital maintenance expenditure is not a defined performance measure under IFRS. DCPayments computation of productive maintenance capital expenditure may differ from similar computations as reported by other issuers and, accordingly, may not be comparable to maintenance capital expenditures as reported by such issuers.Non-cash working capitalNon-cash working capital is not a defined IFRS measure. DCPayments calculates non-cash working capital as current assets less current liabilities, but excluding cash and credit facilities. A summary of this calculation is provided in the MD&A.Forward-looking StatementsThis Press Release contains certain forward-looking statements relating to future events. Forward-looking statements are subject to numerous risks and uncertainties, certain of which are beyond DirectCash Group's ability to control, including the impact to DirectCash Group's business, general economic conditions, consumer spending, borrowing trends and regulatory changes to name a few. Certain statements that contain words such as "could", "believe", "expects", "expected", "will", "intends", "projects", "anticipates", "estimates", "continues" or similar words relating to matters that are not historical facts constitute "forward-looking information" within the meaning of applicable Canadian securities legislation. In particular, forward-looking information and statements contained in this Press Release include statements related to DirectCash's projected growth in Canada and Mexico in the ATM business, projected growth in the prepaid and debit terminal business, accretive acquisitions on a go forward basis, expansion of DirectCash's merchant base through new and innovative products, entry into new geographic markets, ability to continue to acquire long-term recurring services contracts and expected increase in capital expenditures due to regulatory mandated security upgrade changes are all statements that have been stated or referred to throughout this Press Release. Readers are cautioned that actual results may vary from the forward-looking information provided.Additional information about DCPayments is available on SEDAR (www.sedar.com) or DCPayments website at www.directcash.net.FOR FURTHER INFORMATION PLEASE CONTACT: Brian B. KatholDirectCash Payments Inc.Chief Financial Officer(403) 387-2103(403) 451-3003 (FAX)bkathol@directcash.netORAmanda J. GallacherDirectCash Payments Inc.Investor Relations(403) 387-2158(403) 451-3058 (FAX)investorrelations@directcash.netwww.directcash.net

Restrictions

All rights reserved. Republication or redistribution of Thomson Reuters content, including by framing or similar means, is prohibited without the prior written consent of Thomson Reuters. Thomson Reuters is not liable for any errors or delays in Thomson Reuters content, or for any actions taken in reliance on such content. ‘Thomson Reuters’ and the Thomson Reuters logo are trademarks of Thomson Reuters and its affiliated companies.